DoT revives BSNL public issue plan

State-owned Bharat Sanchar Nigam Ltd (BSNL) may be back on track with its plans for an initial public offer (IPO).

The public sector enterprise has placed a proposal for approval of the IPO to its trade union and it expects a positive response by June 3.

"The unions will respond positively to a suggestion for listing of BSNL before June 3, which will help BSNL get Navratna status, which is very essential in order to maintain the image of BSNL and its survival and growth," the Department of Telecommunications said in a statement today.

Only last month BSNL Chairman and Managing Director Kuldeep Goyal had ruled out any plan for an IPO in the near future. "The plan for the IPO is put on the backburner right now. If there is a need for it, we will go for it. Right now we have sufficient funds with us," he had said. Earlier, Minister for Communications and Information Technology, Thiru A Raja had also ruled out the possibility of an IPO. Commenting on the latest development, a senior company executive said plans for the IPO were stagnant and there was no new development. He, however, would not comment on the DoT statement.

Industry analysts valued BSNL at over Rs 4,00,000 crore (Rs 4000 billion), larger than the combined market capitalisation of Bharti Airtel (Rs 1,16,342 crore) and Reliance Communications (Rs 1,19,125 crore). It was suggested that the company would divest 10 per cent through the IPO. An earlier plan to go public in 2005 was disapproved by the then telecom minister Dayanidhi Maran, while the position of the current minister is yet unclear. A final decision in this matter will have to be taken by the government, as it is a state-owned company.

The pan-Indian telecom service provider plans to invest Rs 60,000 crore in the medium-term and requires funds to fulfil these plans. BSNL does not operate in Mumbai and Delhi, which are serviced by MTNL.